In this April 4, 2015, photo, Iranian and U.S. banknotes are on display at a currency exchange shop in downtown Tehran, Iran. (Vahid Salemi / AP)
Iran’s currency, the Rial, fell to a record low on July 29th. It dropped past 100,000 rials to the US dollar, which is a historic low. However, it is noteworthy that the unofficial exchange rate is above 100,000 rials to the US dollar, the official exchange rate is about 44,000 rials to the US dollar.
This comes just before US reimpose the first lot of sanctions on the Iranian economy on August 7th. The sanctions were reimposed on Iran by the US after Donald Trump’s withdrawal from the Iran Nuclear Deal on May 8th.
After the withdrawal of the US from the Iran Nuclear Deal, the EU pledged to help Iran deal with the nearing sanctions. On July 6th, French Foreign Minister Jean-Yves Le Drian spoke to RTL radio, saying “We are trying to do it before sanctions are imposed at the start of August and then another set of sanctions in November. For the start August it seems a bit short, but we are trying to do it by November.”
The rial has lost about half of its value since April because of a vulnerable economy, financial difficulties at local banks and heavy demand for dollars among Iranians who fear the effects of sanctions.
The Iranian government attempted to fix the rate at 42,000 in April and threatened to crackdown on black market traders. Trade, however, continued due to fears of a prolonged economic crisis and Iranians attempting to store their savings in dollars. Banks, however, refused to sell dollars at the artificially low exchange rate and the government, in June, made it a softer rate, allowing for more flexibility for some importers. The handling of this crisis was one of the reasons central bank chief, Valiollah Seif was replaced after Iranian President Hassan Rouhani’s decision on July 25th.
A report from July 27th, as reported by PressTV, states that a shortage of raw materials has tripled the prices of plastic products in Iran, for which traders blame the more expensive US dollar. That, in turn, is encouraging petrochemical suppliers to prefer exports rather than domestic plastics demand.
Mohammad Moqimi-Asl, the head of the Association of Producers of Plastics and Nylon of Iran, as cited by PressTV, said “Providing the raw materials for production of plastics has become extremely difficult than before.” He further accused petrochemical plants of “profiteering” from the country’s current conditions and said they should respect the interests of the state given that “they use huge benefits provided by the government”.
The shortage of petrochemicals, according to Moqimi-Asl, is leading some plastic producers to bankruptcy. This is due to exports being favored as part of a drive to draw more dollars into the country.
On July 29th, as reported by news Agency Mehr, citing first Deputy head of the judiciary of Iran Golyama Hussein Gholam Hossein Mohseni, at least 29 people were arrested for “undermining the economy” of Iran. According to him, the detainees are charged with a crime, for which the possible sentence is the death penalty. He also added a number of people will be arrested on Monday on similar charges and will soon begin a trial. The names of the arrested people have not been disclosed.
One of the sanctions that are to be imposed by the US are targeting Iranian oil exports, which, as a result, are expected to decrease. In response to the sanctions, on July 4th, Iranian President Hassan Rouhani threatened to close the Strait of Hormuz, the Persian Gulf’s waterway, through which 30% of the world’s oil supply passes. India has also warned the US that sanctions on Iranian oil exports will have a ripple effect on energy value chain, according to an unnamed official cited by The Business Line.
After the lifting of the sanctions in 2016, after the conclusion of the Iran Nuclear Deal, real gross domestic growth in Iran has been slower than anticipated, as reported by the National. Furthermore, street protests which started on December 27th, 2017 and lasted until January 3rd, 2018 over the rising cost of living, high unemployment and alleged state corruption, increasing currency volatility. There were further protests on June 25th over the collapsing of the rial.
In addition to that, Iran’s Central Bank, in April started applying restrictions on foreign currency transactions in an effort to shut down a flourishing black market and halt the rial’s fall. These factors, however, have caused a decreased in rial-denominated investments and have led to an increase in demand for hard currency, thus worsening the economic situation.
The ROTHSCHILD Bankers and Soros are SELLING enough of the Rial, to cause it to drop and then will BUY much more of it back at LOW prices, to await the BOUNCE. at which point they will sell again making HUGE profits.
It is a typical GAME to deceive the uninitiated, who will lose fortunes to the Bankers ( and Soros),ONCE AGAIN.
The MAJORITY just don’t understand, “BUY LOW and SELL HIGH” or to put it another way, when NO ONE WANTS it, BUY and when EVERYONE WANTS it, SELL .
That applies to virtually everything, in its time
Ever wondered where Soros etc get their rials? Because countries need to keep US dollars for trade, the US has every country’s currency sitting in US banks. When the US takes a dislike to your currency, they just start selling them on the cheap. It costs the US nothing, because the US can just keep printing dollars.
That’s why the US dollar has to be abandoned, it’s a weapon, not an aid to trade.
It’s quite simpler if the other country can guard their material wealth and just simply say nay to US dollars. The illusion that money in the form of fiat US dollars is a real wealth have been quite strong due to large consumerism behavior, greedy corporation, and sell out corrupt government.
The US has nearly every country’s gold reserve sitting in Treasury and Federal Reserve vaults for safekeeping.
Yes, and when you accept that those countries will never get their gold back, the top gold holder officially becomes Russia. China has a huge secret stash, which it will declare at the appropriate time..
Iran should introduce new currency with different exchange rates. I mean one Iran currency equal to 10 US Dollars. ++++++++++++++++++++++++++++++++++++++++++++++++
why not 100?
That is not logical.
why is 10 logical?
Every currency should has 100 small units to buy anything from the market. If a currency value is let say US$100 so its basic unit will be equal to one dollar. Right.
Now if an item price is 10 Cents, so either you will buy 10 per unit of your currency or you will pick one instead of 10.
Wrong! a BTC has 0.00000001 Satoshi
BTC is a virtual currency while I am talking about real currency.
Gold and silver coins dudes.
yuan is backed by gold in international transactions. For smaller countries to go back to the gold standard, before the gold bonds that are nothing but worthless paper, just like all FIAT money, been eliminated from at least the new banking system BRICS, are creating, it be not functional at the moment because it be as open to speculation as it is the FIAT money right now.
For that the illusion that the US dollars is unshakable reserve currency has to be broken first and that unfortunately quite depends on how much the US citizens at large buys into their hollowed out capitalism.
Read a lot of forums comments that they believed to have a robust domestic economy despite their huge material import dependence. Perhaps this is just how the moneychangers designed them and i should say they’re largely successful in it.
what people believe or not, has absolutely no influence in the international monetary systems. So one day they wake up and realize the $ it has less value than their toilet paper, not unlike the german money, before WW2 that you needed a wheel barrel to buy a loaf of bread.
Australia mints a lot of nice silver. Kookaburra :)
Yes but i think Iran fell short in preparing silver or gold exchange. Should have made their foreign exchange standard instead of dollars so Iran rial to gold or silver first then to dollars. That way they have stronger currency to use with their strategic partner Russia or China.
They can also make their oil contract purchase to entirely petro yuan although that way they’d be constricted with Chinese traders dominated market.
Then again it shouldn’t be that complicated if the EU themselves weren’t tied to US dollars leash.
The “protests” were all fake and staged. They were led by CIA paid stooges and agents. I’m not saying there weren’t some real people participating in them but the it was started, organized, and overwhelmingly led by CIA cells, most of whom have been arrested. They were attempting to spark a color revolution and failed.
If Iran wants to beat the Zionist banks, then Bitcoin should be made the currency. Their is no possible way for Jewish-bankers to stop Bitcoin transactions. Use a mixer and Benjamin Netanyahu and his Rothschild cousins will never know who you are sending money to. India can buy Iranian oil wit Bitcoin.
https://www.reuters.com/article/us-iran-setad-news/exclusive-reuters-investigates-business-empire-of-irans-supreme-leader-idUSBRE9AA0CY20131111
Then there are numerous Iranian Religious Clerics holding Millions in offshore accounts.
Don’t be deceived. ….Iran is a @t Evil leadership nation as Israhell…or District of Criminals in USA.
Syria and Iraq are weapons test ranges for nations to dump old stock weapons. Push narcotics. .. Run black opps with off book capital MIC have even used micro nukes .
Iran’s @tty leaders will probably play the Empire MIC game, Iranians get culled like Syrians, Iraqis,Yemen.
UN luvs the socio genocide.
If I lived in Iran. …I’d move towards the Afghan border Stay away from Iran’s western coast. …which gets bombed,Cruise missile strike in future war.
Assad does nothing about Evil Kurds steal Syrian resources, About USA illegal occupation, The Lunatic Caliph of Turkey. . Israhell attack 6 years straight and tell Damascus the Stolen Golan is Israhells.
Americans get to Enjoy the Mexico.
Syria, Iraq and Iran ….get to enjoy the Global MIC game. Ain’t the World just great!